03 Irelands Role in the EU Post Brexit Brexit in the EU Post Role Irelands OPINION Ireland’s Role in the EU Post Brexit by Senator Neale Richmond In this article, Senator Neale Richmond considers Ireland’s role in the EU post Brexit and whether Ireland needs to reshape relations. In recent weeks, we have seen the President; it is a position that has also Member States in this area, an edge Richmond Neale Senator by European Commission launch a heretofore received strong support that allows smaller Member States public consultation on the future from larger Member States like France to compete on a more even scale. of Qualified Majority Voting at and Germany as well as a wealthy However, with the UK set to leave the European Council level in relation to Member State like Luxembourg, EU, this raises the question of who taxation policies. What this effectively Juncker’s home. will be Ireland’s key allies within an EU means, is the Commission is very of 27 rather than 28? keen to remove what has become Such a move is of course vociferously known as a veto that every single opposed by Ireland and on previous Within the EU, Ireland and the UK EU Member State has over taxation occasions when this idea was co-operate and co-operated on a policy. This is not a surprise and it mooted, the United Kingdom range of key issues, while there are is indeed consistent with the long- were also strongly opposed to a number of other existing alliances held opinion of the Commission, an such a move as it could lead to on key policy areas that interest opinion strengthened by the term of tax harmonisation, removing the Ireland as well as a number that are Jean Claude Juncker as Commission competitive edge that exists between proactively being developed. 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For a confidential chat contact Lucinda Clancy on 01 438 6462 or email [email protected] www.clancybusinessfinance.ie Accountancy Plus March Issue 2019 The New Hanseatic League, or the Hansa, was established in February 2018 by EU finance ministers from Denmark, Estonia, Finland, Ireland, Latvia, Lithuania, the Netherlands and Sweden through the signing of a two-page foundational document which set out the countries’ “shared views and values in the discussion on the architecture of the Economic and Monetary Union of the European Union (EMU).” The name is derived from the Hanseatic League, a Northern European commercial and defensive league which lasted until the 16th century. The New Hanseatic League developed from an informal cooperation among like-minded fiscally conservative northern European states that has also been referred to at various points as ‘The Vikings’, and the ‘Bad Weather coalition’. The grouping sees clubbing together as a way to make up for the loss of the like-minded UK in the European political arena after Brexit. The countries involved want a more developed European single market, particularly in the services sector (i.e. a so-called ‘Capital Markets Union’). They also want to develop the European Stability Mechanism into a full European Monetary Fund that would redistribute wealth from trade surplus to trade deficit EU member states. When it comes more specifically to taxation, Ireland’s corporation tax rate of 12.5% is regularly cited as a target to be addressed through the removal of the supposed veto over taxation policy, to allow for a move towards tax harmonisation within the EU. It is worth remembering though that the average corporation tax rate within the EU is 21%, and 16 Member States have corporate tax rates below this. There are also a number of other Poland and Slovakia have been Furthermore, a number of Member obvious alliances in existence within prominent even though the alliance States have much lower corporate tax the EU based on policy as well as has been in operation at EU and rates than Ireland, including Hungary geography. The Nordic countries NATO levels for a long time, tracing with a corporate tax rate of 9%. In regularly coalesce on a range of it’s routes back to pre-accession this regard, our Finance Minister, issues as do the three Baltic states summits in 1991. Paschal Donohoe, has been proactive and in recent years, the Visegrád or in deepening alliances with Member V4 group of Member States, made But back to Ireland, what will be our States from Central and Eastern up of the Czech Republic, Hungary, new alliances? Europe as well as the Baltic states to Accountancy Plus March Issue 2019 05 Irelands Role in the EU Post Brexit Brexit in the EU Post Role Irelands OPINION oppose any moves towards removing to sign up to PESCO, albeit with a outward looking, country; Ireland the veto. A series of dinners prior range of opt outs. PESCO will have cannot be insular or shut itself off to Ecofin meetings have seen this a budget of €1.5 billion for a number from the rest of the world. Ireland’s approach become more formal. of projects from now until 2020. membership of what is now the EU These projects include a centre of has been overwhelmingly beneficial In relation to Agriculture and Food excellence for EU military training and in both social and economic terms. policy, Ireland has always had a work to allow for new approaches When Ireland joined the EEC in 1973 very special alliance with France. to cybersecurity. The future of with the UK and Denmark it was a Both Ireland and France are massive defence will as much be about the much poorer nation wholly reliant supporters and beneficiaries of engagements online as well as on the on its near neighbour for everything; the Common Agricultural Policy battlefields. independent in name only. In 1973, or CAP. Other Member States are 60% of Ireland’s exports went to the less enthusiastic, particularly those On a personal level, there are also UK, today this figure is much closer with a different approach to their a number of key alliances and to 12% while the EU clearly stands out Richmond Neale Senator by rural or agrarian economies, many friendships. It was no secret that Enda as Ireland’s most important export of whom want further cuts to the Kenny enjoyed a genuine friendship market, taking in multiples of the CAP. Ahead of the negotiation of the with German Chancellor, Angela amount of goods that the UK does next European budget known as the Merkel, a long-standing friendship from Ireland. Multiannual Financial Framework, developed through their leadership of which the CAP is the largest line of their respective parties for over a Staying in the EU post Brexit, item of expenditure, a series of decade where they would regularly strengthening our commitment meetings and discussions have been meet at EU level, the European to the EU and becoming true held between Ministers and officials People’s Party. Since taking over as champions of European integration from like minded Member States. Taoiseach, this is a relationship that is of key strategic interest to Ireland In March of 2018, our Agriculture Leo Varadkar has also been keen to in the post Brexit context. For many Minister, Michael Creed, met with maintain, and he has already met years, it was very easy for politicians, counterparts from France, Spain, Merkel’s successor as CDU Leader, including from my own party, to Portugal, Greece and Finland in Annegret Kramp-Karrenbauer. Within simply blame Brussels for anything Madrid where they signed a joint the EPP family, Austrian Chancellor, negative while simultaneously memorandum requesting that the Sebastian Kurz and Varadkar have claiming responsibility for all the CAP budget be increased to bring it also grown close, helped by their benefits. If we are to survive and back to current levels. This gathering common involvement in European indeed prosper after Brexit we must has been followed by a series of youth politics. Throughout the Brexit give credit where it’s due as well. bilateral meetings in Paris and Cork negotiating process, Ireland has between Minister Creed and his received absolute support from the French counterpart. Netherlands, another country that is exposed to the fall out of a bad Brexit Along with Austria, Finland and and a genuine friendship has been Sweden; Ireland is a neutral country developed between Varadkar and and unlike many other Member Dutch Prime Minister, Mark Rutte. States, none of these countries are members of NATO. However, There are many other formal and all four are strongly committed to informal alliances within the EU that co-operation in defence, security Ireland is not a part of. For example, and peace keeping. Ireland has a there is the Three Seas Initiative of 12 proud tradition of over 60 years Member States belonging to a north- commitment to United Nations’ south axis from the Baltic Sea to the peace keeping missions. That said, Adriatic Sea and the Black Sea made the changing nature of global security up of Austria, Bulgaria, Croatia, Czech and defence policies will mean that Republic, Estonia, Hungary, Latvia, Ireland will also need to adapt.